China's A-share listed companies as a sample, this paper provides empirical
evidence that with the deepening of financialisation in non-financial corporate
sector, the level of corporate risk-taking is significantly reduced, and the
complete mediating effect is R&D innovation. The results are still robust when we use instrumental
variable method, and the negative impact of financialisation on corporate risk
taking is significantly reduced under the constraints of a good governance
mechanism. It is further found that as the degree of financialization in
non-financial corporate sector deepens, even if enterprises have the ability to
take risks, they have no willingness to take risks. This paper theoretically
demonstrates the micro-inducement of the insufficient motivation for enterprise
development, under the “siphon effect” of financialization.
JEL classification numbers: G32, G38
Keywords: Financialization; Risk taking; Entrepreneurial
spirit; Corporate governance.